In finance, the financial system is the system that allows the transfer of money between savers (and investors) and borrowers. A financial system can operate on a global, regional or firm specific level. Gurusamy, writing in Financial Services and Systems has described it as comprising "a set of complex and closely interconnected financial institutions, markets, instruments, services, practices, and transactions."
According to Franklin Allen and Douglas Gale in Comparing Financial Systems:
"Financial systems are crucial to the allocation of resources in a modern economy. They channel household savings to the corporate sector and allocate investment funds among firms; they allow intertemporal smoothing of consumption by households and expenditures by firms; and they enable households and firms to share risks. These functions are common to the financial systems of most developed economies. Yet the form of these financial systems varies widely."
Famous quotes containing the words financial and/or system:
“... aside from the financial aspect, [there] is more: the life of my work. I feel that is all I came into the world for, and have failed dismally if it is not a success.”
—Mary E. Wilkins Freeman (1852–1930)
“In a universe that is all gradations of matter, from gross to fine to finer, so that we end up with everything we are composed of in a lattice, a grid, a mesh, a mist, where particles or movements so small we cannot observe them are held in a strict and accurate web, that is nevertheless nonexistent to the eyes we use for ordinary living—in this system of fine and finer, where then is the substance of a thought?”
—Doris Lessing (b. 1919)